Title Insurance: What You Need to Know

Title Insurance is uniquely different from most other forms of insurance. Whereas most forms of insurance are designed to financially reimburse the policy holder or policy holder beneficiaries for unforeseen occurrences such as accidents, property damage, death, etc., Title Insurance is not risk assumptive. The primary purpose of Title Insurance is to prevent loss. Loss, in this case being because of defects in title due to previously undiscovered or unresolved liens or claims against the property.

Lender Title Insurance: When money is borrowed to purchase property of any kind, the lender will require that the borrower – usually at his/her expense – purchase a Lender's Policy. This policy assures the lending institution that in the event of a problem occurring that would prevent clear transfer of a title to the borrower, the lender – through this Lender’s Policy – will have retained a valid, enforceable lien on the property.

Owner's Title Insurance: It is important to differentiate between Lender and Owner Title Insurance policies. Basically, a lender's Title Insurance policy only protects the lender. Should a defect in title be detected during a title company's document research, the borrower could suffer considerable financial loss unless protected by his/her Owner’s Title Insurance Policy. Title insurance is designed to protect the policyholder against all covered claims, including legal defense, if necessary.

What is a Title: Simply put, a title is a formal document that serves as evidence of ownership. For example, when you purchase an automobile for cash, or when the car loan is paid off, you receive the "Title" to your car, without which you could not sell the car, if you chose, since there would be no valid proof of ownership.

How Important is a Title Search: The value of a title search cannot be underestimated. There are myriad defects that can affect the validity of a property title transfer and prevent a new owner from assuming clear ownership. Among the many possible hindrances to clear title assumption by a new owner are unsuspected heirs, various liens against the property for work performed, money borrowed, second mortgages, unpaid taxes, judgments, etc. Many of these defects may not be reflected in public records; all the more reason for a thorough and meticulous search. Alliance Title's expertise and skills in uncovering these hidden defects is your assurance that ownership of your property will be clear and unencumbered!

"GAP" Coverage: Gap coverage is just what the name implies. Covering both the Mortgagees and Owner's policies, Gap coverage is the period between the closing and the date the documents are recorded. The "gap" between these two events, unless protected by Gap coverage, can be vulnerable to claims, fraud and possible loss.

Title Insurance Cost:

There is a one-time-only premium paid that is directly based on the property value. Title Insurance will continue to provide complete coverage for as long as the purchaser owns the property. View our Title Insurance Calculator to find out your costs.